VEEC price stable at $18 despite Scheme being slated for closure in 18 months’ time

This decision was the outcome of a review (the Business Impact Assessment) which investigated whether the Scheme should continue for its third planned stage from 2015 to 2017, and was based on projections that showed the Scheme would impose a net cost on Victorians if it were to continue beyond this date.

However, the decision also granted a transition year, 2015, to allow the Scheme to wind down. Accordingly, the target will be reduced from 5.4 million VEECs p.a. to 2 million for 2015. Since the current creation levels are around 2 million VEECs per year anyway, we do not expect this change in the target to create too many issues.

As we are typically seeing a VEEC return of above 10% of total project costs, it is well worth prioritising lighting upgrades on your project list. For clients considering a national roll-out of lighting upgrades, we recommend that they undertake their Victorian projects first, because the current VEEC price is much higher than the ESC price - $18/VEEC compared to the $12/ESC available in NSW.

We suggest that all lighting upgrades in Victoria should be completed by the end of June 2015, to enable sufficient time for VEECs to be created, registered and sold. However, as we are uncertain what will happen to the VEEC price towards the end of the Scheme, we would recommend that clients implement their projects as soon as practicable.